BNP Paribas Fintech Development Director: “There is more to gain for both BNP Paribas and fintech start-ups through cooperation than competition”

By Alex Hammond | 1 March 2017

Last month BNP Paribas announced that it was joining forces with Silicon Valley-based tech accelerator scheme Plug and Play to develop future fintech partners to assist with its €3bn digital transformation project. Laurent Herbillon, Director of Development & Cooperation for Start-ups, Fintechs & Insurtechs, spoke exclusively to bobsguide, giving his thoughts on how the partnership will give the bank an edge in the race to become more digitally evolved.

How did the partnership between BNP Paribas and Plug and Play come about? What was the motivation from the BNP Paribas side to cultivate the partnership?

For the past three years, we’ve been specifically investing time and resources into digital transformation, and a focus on greater collaboration with the start-up ecosystem is one of our key objectives as part of that digital transformation process. We think innovation will also come from the ecosystem, and the challenge for us centres on how we can benefit from proximity to the ecosystem.

We have been putting in place a number of initiatives, and now some of that work has reached a stage of maturity, where we want to improve our overall innovation process, from sourcing potential technology partners, to time-to-market. What we are trying to achieve upstream, especially in the selection phase of start-ups to work on new projects with, is to adopt a leaner, faster, more efficient and more “industrial” approach.

The partnership with Plug and Play is just one example of many schemes to meet our objective to be more efficient upstream in our process of accelerating start-ups alongside partners like Plug and Play, who will bring their experience to the process.

So is the motivation for getting involved in the scheme to identify the best start-ups in the industry as early as possible?

We do want to be able to identify the best technologies and ideas in the market early on, but through the scheme we will also be able to more quickly accelerate a proof of concept, and improve the delivery time on fintech and insurtech projects.

Being able to tackle some very complex issues, including customer journey sticking points, is a very important factor for us in our digital transformation. We want to identify start-ups who already have a running product that can match our needs, which the Plug and Play partnership can help us achieve.

At the same time, we also need to explore the evolving possibilities in technology and identify products where at the moment we don’t have a clear need for or understanding of (in terms of its market value).

So we want to address two challenges; meet some business needs, such as our customer journeys, and at the same time explore potential new business models and new services. There is a dual purpose to the investment.

What are the benefits of the program for fintech companies?

One benefit offered among many is to give the start-ups access to all BNP Paribas subsidiary businesses and locations around the world, and the ability to accelerate the business through these.

We are opening an acceleration program in April in Paris with two intakes a year of ten start-ups which will be selected according to our biggest business drives and business needs. This will also give us the ability to have running start-ups that will be more explorational for us.

The program is already launched and the selection process for the first intake of start-ups will conclude around the end of March. We will then start the acceleration program in mid-April. The program will be a collaboration between Plug and Play teams from Silicon Valley and from France to give a more European perspective, and BNP Paribas people. The team that will coach, nurture, and support the ten start-ups is very diversified.

In addition to the coaches, the start-ups can develop a network of BNP Paribas employees that will be leveraged for advice across a series of issues such as compliance, legal, data, business models, and marketing.

Are the start-ups going to be hand-picked by BNP Paribas specifically through identification of potential business partners in the future? Or is there any danger that you might develop a future rival?

We think that there is more to gain for BNP Paribas and fintech start-ups through cooperation rather than competition. We believe that we are complementary companies. The fintechs bring creativity, agility and new technologies, while we bring industry expertise, trust, brand, and customer base to the table, so we’re very complementary.

Of course our objective is not to accelerate start-ups purely because of hype or because it’s fashionable to do so, but because we believe in them, and we have the ability to transform the proof of concept into a real product that is useful for our customers.

So this is a key question and the answer stems from the fact that we are committed to increasing our transformation rate. As well as improving the time-to-market of new products for our customers, we also want to improve the percentage of start-ups that have developed and moved beyond the proof of concept and minimum viable products phase.

The way that we are going to measure the success of this partnership is the number of proof of concepts that we can accelerate into actual transformational services and products that will make a difference for our clients.

BNP Paribas went on record last month with a declaration that it was committing €3bn over the next three years to investment in the digital transformation process. Is this partnership a component of that investment? Or is it a separate project?

It is part of the overall effort made by the bank to accelerate digital transformation. It is one initiative among many others, but it is definitely a part of it.

This partnership is a piece of a larger puzzle through which we want to move forward with open innovation. Other examples of ways we are looking to increase digital transformation include for example the OpenUp platform that we launched last year, which is a matching platform between our needs and start-ups where product managers from BNP Paribas can post projects and where start-ups can register and see if their value proposition can match our needs.

It is a consistent action plan that we are implementing to support our innovation strategy and digital transformation.

Was the idea of attracting some start-ups from London to mainland Europe post-Brexit part of the thinking behind launching the scheme now?

France is becoming more attractive for technology start-ups in general. There are many corporate initiatives going on right now and the government has turned the setting up of operations in France very easy for start-ups. We are counting on the fact that through combining the strength of BNP Paribas, leading bank in the Eurozone, the strength of the partnership with Plug and Play, and the promising start-up environment in France in general, we will be able to attract start-ups from the UK and other countries where we know fintechs are very active and where there is a strong talent pool. We will be able to offer a very attractive program for start-ups who want to expand into Continental Europe.

Looking at digital transformation in more detail, have you already identified any issues or trends that you want to address? Where do you think are the critical areas that the fintech industry is evolving in 2017?

We’re looking at a number of different areas. I’m not going to give too much detail on the things we are looking at, but some of the important questions in the industry at the moment include KYC issues and how to make it faster and more efficient. We’re also looking at how artificial intelligence can help us to provide better services to our customers or how it can customize the customer journey. We’re looking from a regtech point of view how technology can help us with the onboarding process for our customers and make their lives easier there. And then we are looking to be more efficient and provide better services to our clients. These are the types of issues that we are looking at.